population,size of areas,and GDP.In 2001,Jiangsu had a population of 74 millions,compared with the 46 millions in Zhejiang.Jiangsu's GDP reached RMB 951.2 billions (approx.US$115 billions by then),compared with Zhejiang's RMB 674.5 billions(approx.US$81.3 billions). Both provinces are far more affluent than the rest of China.In 2001,the GDP per capita of the two provinces exceeded RMB 12,000,while the national average of GDP per capita stood at RMB7,543. As a whole,both provinces did quite well during the reform era,but Zhejiang,the initially poorer and less well endowed of the two,clearly had an outstanding performance During the reform,its progress of growth was faster and by 2001 it became richer than Jiangsu. Between 1978 and 1995,real GDP grew by 14 percent per annum in Zhejiang but only 12.9 percent in Jiangsu.In 2001,the per capita GDP of Jiangsu was RMB 12,922;that of Zhejiang RMB 14,655.The external sector of Zhejiang's economy also outperformed that of Jiangsu. Starting on a smaller share of foreign trade in GDP,Zhejiang grew much faster in export, averaging 27.9 percent annually between 1978 and 1995,compared with only 9.3 percent in Jiangsu.In 2001,the size of industry and foreign trade was almost identical in the two economies. [Insert Table 1 here] 2.2.Two contrasting development models One of the substantial differences between the two provinces is brought about by the status of domestic private sector development in China.In 1980,the size of the domestic private sector-non-state-owned sector minus collective firms,such as township and village enterprises 1010 population, size of areas, and GDP. In 2001, Jiangsu had a population of 74 millions, compared with the 46 millions in Zhejiang. Jiangsu’s GDP reached RMB 951.2 billions (approx. US$ 115 billions by then), compared with Zhejiang’s RMB 674.5 billions (approx. US$ 81.3 billions). Both provinces are far more affluent than the rest of China. In 2001, the GDP per capita of the two provinces exceeded RMB 12,000, while the national average of GDP per capita stood at RMB 7,543. As a whole, both provinces did quite well during the reform era, but Zhejiang, the initially poorer and less well endowed of the two, clearly had an outstanding performance. During the reform, its progress of growth was faster and by 2001 it became richer than Jiangsu. Between 1978 and 1995, real GDP grew by 14 percent per annum in Zhejiang but only 12.9 percent in Jiangsu. In 2001, the per capita GDP of Jiangsu was RMB 12,922; that of Zhejiang RMB 14,655. The external sector of Zhejiang’s economy also outperformed that of Jiangsu. Starting on a smaller share of foreign trade in GDP, Zhejiang grew much faster in export, averaging 27.9 percent annually between 1978 and 1995, compared with only 9.3 percent in Jiangsu. In 2001, the size of industry and foreign trade was almost identical in the two economies. [Insert Table 1 here] 2.2. Two contrasting development models One of the substantial differences between the two provinces is brought about by the status of domestic private sector development in China. In 1980, the size of the domestic private sector—non-state-owned sector minus collective firms, such as township and village enterprises